-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, nqlVC0ZzHzZ8CaRR/gYI/9Oimt9e8RmY96V8VurjjgHPQi8wXEUWbYdSCJgBuLMl TP+K0jqyKtoIEqiTStMloQ== 0000700674-94-000009.txt : 19941122 0000700674-94-000009.hdr.sgml : 19941122 ACCESSION NUMBER: 0000700674-94-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: AMEX SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIR EXPRESS INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000700674 STANDARD INDUSTRIAL CLASSIFICATION: 4731 IRS NUMBER: 362074327 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08306 FILM NUMBER: 94559372 BUSINESS ADDRESS: STREET 1: 120 TOKENEKE RD P.O. BOX 1231 CITY: DARIEN STATE: CT ZIP: 06820 BUSINESS PHONE: 2036557900 MAIL ADDRESS: STREET 1: 120 TOKENEKE RD STREET 2: P O BOX 1231 CITY: DARIEN STATE: CT ZIP: 06820 10-Q 1 1994 THIRD QUARTER 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 1994 Commission file number: 1-8306 ------ AIR EXPRESS INTERNATIONAL CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 36-2074327 - - ------------------------------------ ------------------------------------ (State or Other of Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 120 Tokeneke Road, Darien, Connecticut 06820 (203) 655-7900 - - -------------------------------------------------------------------------------- (Address of, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) NONE - - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 3 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date (applicable only to corporate registrants). The number of shares of common stock outstanding as of November 9, 1994 was 13,802,978. (Net of 2,184,208 Treasury Shares) ================================================================================ AIR EXPRESS INTERNATIONAL CORPORATION September 1994 Form 10-Q Quarterly Report Table of Contents Part I - Financial Information Page ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets as at September 30, 1994 and December 31, 1993.................. 2 Condensed Consolidated Statements of Operations - three months and nine months ended September 30, 1994 and 1993.................................................. 3 Consolidated Statements of Cash Flows - nine months ended September 30, 1994 and 1993............. 4 Notes to Condensed Consolidated Financial Statements................................................ 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 7 Part II - Other Information Item 1. Legal Proceedings......................................... 9 Item 6. Exhibits and Reports on Form 8-K.......................... 9 Page 2
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, 1994 December 31, 1993 ------------------ ----------------- (Unaudited) Assets Current Assets: Cash and cash equivalents $ 32,507 $ 55,063 Short-term investments 30,070 10,109 Accounts receivable, (less allowance for doubtful accounts of $3,178 and $2,846) 180,261 150,969 Other current assets 3,914 3,224 ---------- ---------- Total current assets 246,752 219,365 Investment in unconsolidated affiliates 8,419 7,595 Property, plant and equipment (less accumulated depreciation and amortization of $35,853 and $34,096) 36,462 27,323 Deposits and other assets 5,941 4,604 Goodwill (less accumulated amortization of $5,971 and $4,674) 47,303 37,331 ---------- ---------- Total assets $ 344,877 $ 296,218 ========== ========== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Current portion of long-term debt $ 2,030 $ 1,509 Transportation payables 83,839 69,640 Accounts payable 31,759 28,561 Accrued liabilities 39,920 28,250 Income taxes payable 11,136 10,587 ---------- ---------- Total current liabilities 168,684 138,547 Long-term debt 82,242 78,464 Deferred income taxes 1,422 1,088 ---------- ---------- Total liabilities 252,348 218,099 Stockholders' Investment: Capital stock- Preferred (authorized 1,000,000 shares, none outstanding) - - Common, $.01 par value (authorized 40,000,000 shares, issued 13,791,912 and 13,711,333 shares) 137 137 Capital surplus 41,816 41,251 Cumulative translation adjustments (12,074) (12,282) Retained earnings 102,626 88,657 ---------- ---------- 132,505 117,763 Less: 2,183,208 and 2,167,773 shares of treasury stock, at cost (39,976) (39,644) ---------- ---------- Total stockholders' investment 92,529 78,119 ---------- ---------- Total liabilities and stockholders' investment $ 344,877 $ 296,218 ========== ==========
The accompanying notes are an integral part of these financial statements. Page 3
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- ---------- ---------- Revenues $ 258,175 $ 192,071 $ 700,984 $ 513,931 Operating expenses: Transportation 183,079 133,101 494,103 348,456 Terminal 39,105 31,208 109,234 86,618 Selling, general and administrative 25,255 20,335 70,638 56,057 ---------- ---------- ---------- ---------- Operating income 10,736 7,427 27,009 22,800 Other income (expense): Interest expense, net (772) (996) (2,484) (2,727) Other, net 424 (66) 1,396 266 ---------- ---------- ---------- ---------- (348) (1,062) (1,088) (2,461) ---------- ---------- ---------- ---------- Income before provision for income taxes 10,388 6,365 25,921 20,339 Provision for income taxes 4,078 2,620 9,980 7,791 ---------- ---------- ---------- ---------- Net income $ 6,310 $ 3,745 $ 15,941 $ 12,548 ========== ========== ========== ========== Income per common share Primary $ .54 $ .32 $ 1.36 $ 1.07 ========== ========== ========== ========== Fully diluted $ .50 $ .32 $ 1.30 $ 1.06 ========== ========== ========== ========== Weighted average number of common shares (000): Primary 11,784 11,674 11,720 11,705 ========== ========== ========== ========== Fully diluted 14,003 13,872 13,976 13,656 ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. Page 4
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 (Unaudited) (Dollars in thousands) 1994 1993 ---------- ---------- Cash flows from operating activities: Net income $ 15,941 $ 12,548 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,126 3,747 Amortization of goodwill 974 819 Deferred income taxes (416) (524) Undistributed (earnings) losses of affiliates (619) (238) Gain on sales of assets, net (19) (86) Other, net (1,415) (396) Changes in assets and liabilities: Decrease (increase) in accounts receivable, net (13,154) 12,505 Decrease (increase) in other current assets (218) (753) Increase (decrease) in transportation payables 9,575 (7,378) Increase (decrease) in accounts payable (6,161) (9,310) Increase (decrease) in accrued liabilities 6,680 986 Increase (decrease) in income taxes payable (130) 2,123 ---------- ---------- Total adjustments (777) 1,495 ---------- ---------- Net cash provided by operating activities 15,164 14,043 Cash flows from investing activities: Business Acquisitions, net of cash acquired (10,345) (9,188) Purchase of short-term investments (19,961) (44,208) Gains (losses) from hedging activities (874) (343) Proceeds from sales of assets 234 144 Capital expenditures (7,438) (3,275) ---------- ---------- Net cash used in investing activities (38,384) (56,870) Cash flows from financing activities: Net borrowings (repayments) under revolving credit agreement - (5,000) Additions to long-term debt 2,694 72,486 Payment of long-term debt (1,401) (4,168) Issuance of common stock 565 330 Payment of cash dividends (1,852) (1,385) Purchase of treasury stock (332) (1,355) ---------- ---------- Net cash (used) provided in financing activities (326) 60,908 Effect of foreign currency exchange rates on cash 990 (590) ---------- ---------- Net increase (decrease) in cash and cash equivalents (22,556) 17,491 Cash and cash equivalents at beginning of period 55,063 14,113 Cash and cash equivalents at end of period $ 32,507 $ 31,604 ========== ==========
The accompanying notes are an integral part of these financial statements. Page 5 AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. The consolidated balance sheet at September 30, 1994, the consolidated statements of operations for the three-month and nine-month periods ended September 30, 1994 and 1993, and the consolidated statements of cash flows for the nine-month periods ended September 30, 1994 and 1993 have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods have been made. Certain items in the September 30, 1993 financial statements have been reclassified to conform to the classification of September 30, 1994. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report to stockholders for the year ended December 31, 1993. The results of operations for the three and nine month periods ended September 30, 1994 are not necessarily indicative of the results of operations expected for the full year ending December 31, 1994. B. Investments in equity affiliates are recorded using the equity method. Consolidated net income reflects joint venture profits of $262,000 and $673,000, respectively, for the quarter and nine months ended September 30, 1994, compared with profits of $188,000 and $284,000, for the quarter and nine months ended September 30, 1993. C. Interest expense, net is as follows:
Three Months Ended Nine Months Ended September 30, September 30, -------------------------- -------------------------- 1994 1993 1994 1993 ---------- ---------- --------- ---------- Interest expense $ (1,492) $ (1,539) $ (4,332) $ (4,443) Interest income 720 543 1,848 1,716 ---------- ---------- --------- ---------- Interest expense, net $ (772) $ (996) $ (2,484) $ (2,727) ========== ========== ========= ==========
Page 6 D. Other income (expense) is as follows:
Three Months Ended Nine Months Ended September 30, September 30, -------------------------- ------------------------- 1994 1993 1994 1993 --------- ---------- --------- --------- Foreign exchange gains, net $ 417 $ 3 $ 1,377 $ 180 Other, net 7 (69) 19 86 ---------- ---------- --------- ---------- $ 424 $ (66) $ 1,396 $ 266 ========== ========== ========= ==========
E. Statement of cash flows - interest and income taxes paid:
Three Months Ended Nine Months Ended September 30, September 30, -------------------------- ------------------------- 1994 1993 1994 1993 --------- ---------- --------- --------- Interest $ 2,428 $ 2,315 $ 5,000 $ 3,002 Income taxes 3,338 3,423 9,387 7,092 ---------- ---------- --------- ---------- $ 5,766 $ 5,738 $ 14,387 $ 10,094 ========== ========== ========= ==========
F. Acquisitions: During the second and third quarters, the Company acquired Unimodal Australia Pty. Ltd. (Unimodal), an ocean freight forwarder based in Australia, Banner International Ltd. (Banner), an airfreight forwarder located in New Zealand, and Pace Express Pty. Ltd. (Pace), an airfreight forwarder located in Australia, for approximately $12.0 million in cash. The acquisitions have been accounted for as purchases; the cost of which has been allocated on the basis of the estimated fair market value of the assets acquired and the liabilities assumed. This allocation resulted in goodwill of approximately $9.0 million. The results of operations for these companies are included in the consolidated statement of income from the acquisition dates forward. G. Short-term Investments: The Company has adopted statement of Financial Accounting Standards No. 115 "Accounting for Certain Investments in Debt and Equity Securities." As a result, short-term investments are classified as available for sale and recorded at cost, which approximates market. The investments consist of U.S. Government instruments with original maturities in excess of three months. Page 7 Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- Results of Operations - - --------------------- Included in the results of operations for the third quarter and nine months ended September 30, 1994 are the results from the ocean freight activities which include the activities of Votainer, which was acquired by the Company in the third quarter of 1993. The results of the airfreight and ocean freight activities for the 1994 periods are:
Nine Months Third Quarter 1994 Ended September 30, 1994 -------------------------------------------- -------------------------------------------- Air Ocean Air Ocean Freight Freight Total Freight Freight Total --------- --------- --------- --------- --------- --------- Revenues $ 226,518 $ 31,657 $ 258,175 $ 621,324 $ 79,660 $ 700,984 Expense: Transportation 159,963 23,116 183,079 434,106 59,997 494,103 Terminal 34,550 4,555 39,105 97,335 11,899 109,234 Selling, general and administrative 22,322 2,933 25,255 62,574 8,064 70,638 --------- --------- --------- --------- --------- --------- Operating income (loss) $ 9,683 $ 1,053 $ 10,736 $ 27,309 $ (300) $ 27,009 ========= ========= ========= ========= ========= =========
Revenues for the third quarter and the nine months ended September 30, 1994 increased 34.4% to $258.2 and 36.4% to $700.9, respectively, over the comparable periods in 1993. Airfreight revenues for the third quarter and the nine months increased 36.0% to $226.5 and 27.2% to $621.3, respectively. The increase in airfreight revenues for both the quarter and nine months was due to increases in shipments and the total weight of cargo shipped. For the quarter, shipments increased 10.5% and the weight of cargo shipped increased 38.7% over the third quarter of 1993. For the nine month period, shipments increased 10.5% and the weight of cargo shipped increased 30.7% over the first nine months of 1993. Gross profit (revenues less transportation expense) from airfreight operations for the third quarter of 1994 increased $13.8 million or 26.1% over the comparable 1993 period to $66.6. For the nine months, gross profit increased $27.9 million or 17.5% over the comparable 1993 period to $187.2. The higher gross profit for both the quarter and nine month periods was attributable to increases in both shipments and total weight of cargo shipped. The gross margin (gross profit as a percent of revenues) decreased approximately 2.3% for the quarter and 2.5% for the nine months when compared to the comparable periods in 1993. This decrease is due to the Company's customers shipping significantly more weight which resulted in lower selling prices per unit of weight, and competitive pricing pressures. Page 8 Internal operating expenses (terminal, selling and general and administrative) increased $12.8 million or 24.9% for the quarter and $37.2 million or 26.1% for the nine month period from the comparable periods in 1993. These increases were mainly attributable to the inclusion of the internal operating expenses for Votainer and several smaller acquisitions which were acquired by the Company subsequent to June 30, 1993. As a percentage of revenues, internal operating expenses were 24.9% for the quarter and 25.7% for the nine months in 1994 as compared to 26.8% and 27.8%, respectively, for the comparable periods in 1993. The improvement in both periods resulted from the greater efficiencies associated with the increase in shipments and shipment weights. Interest expense for the third quarter and the first nine months of 1994 was marginally lower than the comparable periods in 1993. The effective income tax rates for the quarter and nine months ended September 30, 1994 were 39.3% and 38.5%, respectively. For the quarter, the effective rate decreased 1.8% from 41.1% for the 1993 quarter. The higher effective rate in the 1993 quarter resulted mainly from the Company's adjustment of its year-to-date effective tax rate to reflect the 1% increase in the United States Federal statutory rate and losses incurred by various foreign subsidiaries for which there were no tax credits available. For the first nine months of 1994, the effective income tax rate was 38.5% which was marginally higher than the 38.3% rate for the comparable 1993 period. Liquidity and Capital Resources - - ------------------------------- As of September 30, 1994, the Company's working capital decreased approximately $2.7 million to $78.1 million from $80.8 million at December 31, 1993. The decrease is mainly attributable to the business acquisitions (See Note F). Capital expenditures for the nine months ended September 30, 1994 were $7.4 million compared to $3.3 million for the first nine months of 1993. This increase is due primarily to the construction costs for the Company's new warehouse and distribution facility in Singapore. This facility is scheduled for completion in March, 1995 at a cost of approximately $10.0 million, which will be partially financed by a $6.5 million mortgage loan. At September 30, 1994, the Company had available for future borrowings $19.73 million of its $20.0 million revolving credit facility. Additionally, the Company's foreign subsidiaries had approximately $11.2 million available under various overdraft facilities with foreign banks. Page 9 PART II - OTHER INFORMATION Item 1. - Legal Proceedings ----------------- The Company believes that there are no legal proceedings, other than ordinary routine litigation incidental to the business of the Company, to which the Company or any of its subsidiaries is a party. Management is of the opinion that the ultimate outcome of existing legal proceedings, if adverse, would not have a material effect on the Company's consolidated financial position. Item 2. - Changes in Securities. --------------------- Not Applicable. Item 3. - Default Upon Senior Securities. ------------------------------ Not Applicable. Item 4. - Submission of Matter to a Vote of Security Holders. -------------------------------------------------- Not Applicable. Item 5. - Other Information. ----------------- Not Applicable. Item 6. - Exhibits and Reports on Form 8-K -------------------------------- a) Computation of Earnings Per common Share - Exhibit 11 Page 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Air Express International Corporation ------------------------------------- (Registrant) Date: November 10, 1994 /s/ Dennis M. Dolan ------------------------------------- Dennis M. Dolan Vice President and Chief Financial Officer (Principal Financial Officer) Date: November 10, 1994 /s/ Walter L. McMaster ------------------------------------- Walter L. McMaster Vice President - Controller (Principal Accounting Officer) EX-11 2 COMPUTATION OF EARNINGS PER COMMON SHARE Exhibit 11
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) (In thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, -------------------------- -------------------------- 1994 1993 1994 1993 --------- ---------- ---------- ---------- Primary: Net income applicable to common shares $ 6,310 $ 3,745 $ 15,941 $ 12,548 ========== ========== =========== =========== Weighted average of common shares outstanding 11,604 11,523 11,581 11,555 Common shares issuable on exercise of stock options 180 151 139 150 ---------- ---------- ----------- ----------- Average common shares outstanding 11,784 11,674 11,720 11,705 ========== ========== =========== =========== Earnings per common share $ .54 $ .32 $ 1.36 $ 1.07 ========== ========== =========== =========== Fully diluted: Weighted average of common shares outstanding 11,604 11,523 11,581 11,555 Common shares issuable on exercise of stock options 205 155 201 150 Common shares issuable upon assumed conversion of subordinated debentures 2,194 2,194 2,194 1,951 ---------- ---------- ----------- ----------- Average common shares outstanding 14,003 13,872 13,976 13,656 ========== ========== =========== =========== Earnings per common share $ .50 $ .32 $ 1.30 $ 1.06 ========== ========== =========== =========== Primary earnings per share are computed by dividing net income by the weighted average common and common equivalent shares outstanding during the period. Fully diluted earnings per share have been calculated assuming the conversion of the subordinated debentures and the elimination of the associated interest expense, net of tax. For the quarters ended September 30, 1994 and 1993, the interest elimination was $.73 million and $.73 million, respectively. For the nine months ended September 30, 1994 and 1993, the interest elimination was $2.19 million and $1.94 million, respectively.
EX-27 3
5 1000 9-MOS DEC-31-1994 SEP-30-1994 30,507 30,070 183,439 3,178 0 246,752 72,315 35,853 344,877 168,684 82,242 137 0 0 144,442 344,877 0 700,984 0 494,103 109,234 490 4,332 25,921 9,980 15,941 0 0 0 15,941 1.36 1.30
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